The volume of bonus bluster coming from Congressional and Executive blowhards has covered over the fact that executive compensation under TARP (including bonuses) is provided for in the stimulus organ which many of these bloviating boneheads voted for and which His Beatitude signed. For the discussion which follows I am relying upon the final version of the stimulus organ (which you can read in all its glorious entirety, here).

As I've mentioned (here and here), at no time have we been told who these bonus recipients are. Now, unlike lynch mob-inciting politicians like Barney Frank, Chris Dodd, and, of course, His Beatitude, I don't want to know the names of these people. Their names aren't really important, unless you want to make sure that violent leftists know who stand up against walls and shoot. What is important -- and what I've been getting at -- is that we don't know what types of executives these are. We don't what what, if any responsible role, they have played in the mess at AIG. We know only that "executives" in the division of AIG which caused the mess have received, altogether, a whopping .095% of the TARP money given to AIG, less than one one-hundredth of a percent.

Type of executive is important because the stimulus organ, for which these screaming banshees voted (unread, as I suggested here) and which Epihanes signed, also unread, I'm sure, provides for compensation of executives, including bonuses. But the stimulus organ categorizes executives, and then specifies the limits to their compensation, including bonuses. Division B, Title VII ("LIMITS ON EXECUTIVE COMPENSATION") defines, for example, a Senior Executive Officer, as "an individual who is 1 of the top 5 most highly paid executives of a public company, whose compensation is required to be disclosed pursuant to the Securities Exchange Act of 1934, and any regulations issued thereunder, and nonpublic company counterparts." Furthermore, the stimulus organ provides for the prohibition of certain forms of compensations, including retention bonuses for executive officers.

However, Title VII, Section 7001 ("EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE"), which amends Section 111 of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5221), (b), (3), (D)(ii),(IV), (iii) [you have to love the way legislation is written] states "The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary."

The aforementioned clause (i) provides for a prohibition of certain forms of compensation during the period for which TARP recipients have an outstanding obligation (i.e., owe the government the money for the loan). Furthermore, and this goes to my point about the types of executives affected by the stimulus organ, clause (i) specifies prohibitions as applying to the top 5 most highly compensated executives (or the top 10, depending upon more specific provisions of clause (i)).

But the limitations on bonuses received by executives, including senior executives, do not apply, once again, according to clause (iii) because these compensation contracts were executed on or before February 11, 2009.

So, yes, Congress and the Constitutional Dictator, first permitted, by law, the payment of these bonuses and now pretend they had no idea. They now pretend outrage and disgust. They now seek to take away what they first gave.